News Release
ICT, R&D represent 9,000 JOBS in 200 companies (News)
August 15, 2010
By STEPHEN LLEWELLYN
Lllewellyn.stephen@dailygleaner.com
The fourth building in the Fredericton Knowledge Park will be 50 per cent bigger than any of the three existing buildings.
The new 45,000 square foot (4,181 square metre), three-story building announced earlier this summer will also have a Centre of Excellence on Advanced Learning Technology.
For many, that is a perfect analogy for what is happening in the red hot information and communications technology and research and development sectors in the capital.
"The exciting news for Knowledge Park is the centre of excellence is going to be there," said Doug Motty, CEO of Enterprise Fredericton, in a recent interview.
"They are going to be the anchor tenant in the fourth building."
The federally- and provincially-funded centre will be ideal for companies interested in e-learning content, learning systems, simulation and the gaming industry, he said.
Motty said the ICT and R&D sectors in the Fredericton area currently employ between 8,000 and 9,000 people in more than 200 companies.
The companies are almost too numerous to mention but include names such as xwave, Q1Labs, Radian6, Accreon, RPC, C-Therm, Atlantic Hydrogen, the National Research Council, Remsoft, Stantec, LuminUltra Tech, Bluedrop Performance Learning and the University of New Brunswick.
The bio-sciences area alone has more than 1,500 employees, said Motty.
"There are always mergers going on and acquisitions and new companies coming in," he said.
"The vast majority of the companies are in the size of 10 to 25, 50 people."
Some have 300 to 400 people while others might be a single person with a good idea, he said.
"The IT sector ... is growing," said Motty.
"They are looking for more people."
That demand is being driven by all kinds of companies that want to use ICT to become more efficient, he said. Health information and security and information privacy are particularly hot areas, he said.
Motty said the long-range forecast is that the demand will continue to grow.
The success of the information and communication technology and research and development industries in Fredericton is a result of the make up of this community and the graduates coming out to UNB's engineering and computer science programs who wanted to start their own businesses here, he said.
"That was one of the fundamental building blocks, having a supply of skilled, talented, entrepreneurial people," said Motty.
Another key piece of the puzzle was that, in the 1990s, the provincial government decided to be a model user of the information highway secretariat and support local businesses, he said.
"That ideally positioned New Brunswick but I think it really had a positive impact on the Fredericton area," said Motty.
In the mid-1990s the Knowledge Industry Task Force was set up to celebrate success in that field with annual awards and cyber socials. Motty said the capital's ever expanding goal for information technology and research and development is to reach a critical mass that is self sustaining.
Susan Holt, CEO of the Fredericton Chamber of Commerce, said the impact of the ICT and R&D sectors on the Fredericton economy is huge.
"The R&D and ICT sectors are known for producing great compensation packages and benefits," she said.
"A large portion of both the chamber membership and our business community is made up of ICT, R&D focused, engineering type firms.
"They contribute a large amount of employment and dollars to the tax base."
Those companies also contribute to the capital's social infrastructure because of the philanthropy those organizations execute, said Holt.
Holt said that despite that success the sector needs more assistance from government.
"The chamber would love to see a more aggressive SHRED tax system, a research and development-based tax credit where companies that are investing in research and development can do so at a lower tax rate," she said.
There is a SHRED program in place in virtually every province in Canada, she said. But other provinces are being much more aggressive on that front than ours, she said.
Larry Sampson, executive director of the New Brunswick Information Technology Council, agreed about the need for a better tax credit system.
"We've got good infrastructure on the research and development front but we are really not attracting the level of research and development that we should," he said.
The federal-provincial research and development tax credit is worth 50 per cent in New Brunswick. But Quebec's combined tax credit for R&D is as much as 70 per cent.
Sampson said New Brunswick does not have to be the best when it comes to tax credits.
"But we need to be competitive," he said.
Sampson said the provincial government should also focus on research and development companies when they go looking for companies to attract to New Brunswick.
If New Brunswick can acquire a reputation as a place where lots of research and development gets done that will attract a lot of investment, he said.
"We have a lot of the right pieces. It is a question that we have to get them scaled up," said Sampson.
Peter Lindfield, president and CEO of the Carlisle Institute, a New Brunswick-based think tank, said the biggest challenge facing the information and communication technology industry in Fredericton and the rest of New Brunswick is access to cash.
"Research has shown the ICT industry, especially at the start-up end of the growth spectrum, needs much better access to inexpensive capital," he said.
Lindfield said the Carlisle Institute is looking at the need for a New Brunswick bank that is responsive to startup firms in this industry and a couple of others.
He said it should be a combination of private and government funding.